VUCA?

VUCA. Have you heard this acronym? If not, then let me suggest that VUCA is a good abbreviation to know and understand, especially if you lead or work in an organization. The word stands for Volatile, Uncertain, Complex, and Ambiguous. It was coined in a 1998 US army report published to train and educate army officers for the 21st century. Subsequently, VUCA became well known in the business development world as an especially important concept for leadership development in the New Era or Information Age. As the phrase suggests, today’s world is an immensely complex, richly interconnected, and rapid-paced environment.

The key point is that an organization is beyond the control of any one person or group. A leader who believes that he or she “runs a tight ship” and is “in command” is trapped in a false narrative. Our world, the environments where we live and work, is far too complex to be controlled. Certainly, it can be influenced and we can and should work toward our goals and objectives, but the idea that with careful planning and monitoring we are guaranteed a predetermined and predictable outcome is a prevalent myth. Here is what we can safely predict: the unexpected! Change is quite possibly our only certainty in life. Consider the 2016 election, Brexit, cybercriminals, or the rise of the “me too” movement. We need not look far on any given day to illustrate these points.

The implications for leadership are serious; yet, leaders and practitioners continue to be perilously blind to the obvious. For example, this morning I read an article about VUCA by Bill George, the former chair and CEO of Medtronic, now a senior fellow at Harvard Business School. In his commentary (he calls it VUCA 2.0), George describes what he believes leaders need in order to succeed in our tumultuous environments. He notes “rapid-fire changes are putting extreme pressure on business leaders to lead in ways not heretofore seen.” In short, his four requirements of a “VUCA manager” are:

Vision to guide the organization toward its future;

Understanding (or knowledge) of the firm’s capabilities and strategies;

Courage to make audacious leadership decisions; and

Adaptability, meaning the leader’s ability to be flexible in response to change.

While I agree these are important, George and many business-minded people like him are missing the quintessential leadership quality for success in a VUCA world: it is not about the leader, it is about the leadership! Good leadership in the information age is not about a single person or a single position; it’s about a process. To succeed in a VUCA world means the organization must respond rapidly to change in the environment. Here is the critical point: the only way to achieve the adaptive capacity of a change-ready organization is to foster leadership at all levels. It is an audacious goal that demands psychologically safe workplace environments where people move in-to and out-of leadership roles according to the organizational context and expertise required. In other words, to thrive in today’s fast-paced environment requires formal and informal leadership. To be specific:

Formal leadership – These leaders are formally chosen and they play three important roles: 1) administrative, 2) adaptive, and 3) enabling (Uhl-Bien, Marion, McKelvey, 2007). To be administrative means to focus on business results. To be adaptive is to create adaptive capacity among all organizational stakeholders. Finally, to “enable” means to develop an environment in which employees can optimize their skills and talents and be their most creative selves. Enabling occupies the space between administrative and adaptive.

Informal leadership – Informal leaders comprise all other stakeholders in the organization. These are the folks ready, willing, and able to don a leadership hat as the context and circumstances mandate. Informal leaders work in fail-safe environments and are willing to take calculated risks. They understand that failure will be treated as learning and growth (as long as they don’t fail every time!).

Here we must take note: the three important roles of the formal leader comprise a fundamental leadership transformation, what some call a paradigm shift. It moves leaders from the autocratic, command-and-control leadership style of the industrial era to the team-based and adaptive capacity leadership of the information age. Here is the challenge: most traditional leaders are oblivious to the need for change. If they are aware of the urgency, this critical leadership transformation becomes a scary proposition. Sadly, it is perceived as surrendering power and control (even if “control” is only a myth!) and few traditional leaders are willing to change.

Here is how I see George’s four leadership requirements in a Volatile, Uncertain, Complex and Ambiguous (VUCA) world:

Vision: An organization’s vision is critical, but it cannot be the product of one or a few; to be truly visionary and effective vision must be developed in a genuine and highly collaborative organizational process;

Understanding within Context: All stakeholders (not just formal leaders) must have a thorough understanding of the organization’s capabilities, goals, and strategies, as well as an understanding of them within the context of the marketplace and industry. In other words, the interrelationship between the organization’s internal operations and the system it is part of;

Courage: Formal leaders must have the courage to promote and share leadership (an audacious concept!) and to create supportive workplace cultures; and finally,

Adaptive: The creation of adaptive capacity must be a formal leader’s primary goal for the organization and everyone in it.

George is right about leaders in a VUCA world, “their greatest risk lies in not having the courage to make bold moves.”